BOSTON. Red Hat is a company that generates over $1 billion a year in revenues from open source software.

It should come as no surprise then, that the CEO of Red Hat sees being open as the key to innovation. Speaking at the opening keynote for the Red Hat Summit, CEO Jim Whitehurst stressed that open isn't just a marketing slogan, it's the only way that modern IT companies can survive.

"Open collaboration is the social technology that underpins our ability to move from client server to the cloud social era of computing," Whitehurst said. "With the closed model you're guessing what customers want and can only leverage the ideas that you come up with yourself."

In Whitehurst's view, the new paradigm of how things are created is where we can leverage the wisdom of the crowds. At some point in the last year or two, the industry has hit an inflection point where more innovation is happening in open communities than what is coming out of traditional proprietary communities.

"The most negative thing you could say today is open source only delivers incremental innovation," Whitehurst said.

In the beginning of the open source era, however, incremental innovation was the norm. For example, many initially viewed Linux as a better implementation of Unix and MySQL, as an incremental innovation of a database.

With the emergence of cloud, Whitehurst argued that all of the core innovations are coming from open source, except for one.

"Name an innovation that isn't happening in open source - other than Azure," Whitehurst said.

Why Now?

As to why open source is the leading source for innovation now, as opposed to some point in the past, it all has to do with technology enablement, specifically the ubiquity of broadband connectivity.

"The technology now finally exist that allows for mass collaboration, the pipe and sewers that enable high bandwidth," Whitehurst said.

Cost

While some in the past have associated open source with cost – it's the cheaper alternative to proprietary approaches – that's not the point anymore. The innovation model for open collaboration enables multiple competitive vendors to co-operate on core functionality and then compete on value added support and services.

"The most strategic users of open source are not doing it because of cost," Whitehurst said. "There are doing it because it is more agile and more flexible."

Red Hat CEO Jim Whitehurst

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist.